Could Tariffs Cause Shortages of Vital Medications?

Tariffs on pharmaceuticals threaten to disrupt the U.S. medication supply. Intended to reduce reliance on foreign manufacturers, they could instead cause shortages, raise costs, and weaken patient access. These risks are especially high for generic drugs, which make up nearly 90% of all prescriptions filled in the United States.

Why Are Tariffs Being Applied to Medicines?

Tariffs are trade tools designed to protect domestic industries by taxing imported goods. In the pharmaceutical sector, the goal is to encourage companies to manufacture drugs in the U.S. rather than rely on global supply chains. However, experts say the pharmaceutical industry is too globally integrated for this approach to work quickly or cleanly.

Much of the U.S. drug supply, particularly for generic medicines and active pharmaceutical ingredients (APIs), comes from countries like India, China, and those in the European Union. According to a report from Brookings, applying tariffs to these imports is likely to drive up prices and disrupt supply long before it yields any manufacturing resurgence.

Supply Chain Disruptions From Tariffs

The U.S. depends heavily on pharmaceutical imports. Many generic drugs are produced overseas, where lower costs help keep prices affordable. Tariffs increase import costs. If companies can't pass those costs to buyers, they may choose to stop supplying the U.S. altogether.

As detailed in a Cancer Therapy Advisor analysis, drugs such as antibiotics, sterile injectables, and intravenous fluids are especially vulnerable. They are essential but offer thin margins, which means even modest tariff hikes can make them unprofitable.

The Journal of Managed Care & Specialty Pharmacy also confirms that many generics are already supplied by only one or two manufacturers. If even one exits due to tariff pressures, the remaining company may not be able to meet demand.

Unintended Hoarding and Shortages

News of upcoming tariffs often leads to panic stockpiling. Hospitals, pharmacies, and distributors rush to buy drugs before prices rise or supply tightens. This behavior can exhaust inventories and worsen uneven access.

According to a Sermo healthcare provider survey, many physicians and pharmacists have already reported localized shortages tied to hoarding and purchasing surges. These patterns reflect a reactive system with limited resilience.

Delays in Domestic Drug Production

Supporters of tariffs argue that they can encourage drug companies to return production to the U.S. While that goal is understandable, building pharmaceutical manufacturing plants is not quick or cheap. The process often takes 5 to 10 years, involving regulatory hurdles, construction costs, and workforce training.

The Kenan Institute points out that even if domestic production eventually replaces imports, Americans may face higher costs and reduced access for years during the transition.

In the meantime, current shortages may deepen as manufacturers exit or scale back shipments.

Drug Prices Will Rise

Tariffs increase the price of imported medicines. When pharmaceutical companies absorb those costs, their profits shrink. When they pass them on, consumers and insurers pay more.

A New York Times report estimated that a 15% tariff on medicines from Europe could add billions to the annual costs for American drugmakers. These costs eventually show up as higher out-of-pocket expenses and insurance premiums.

For low-income and uninsured patients, price increases can make essential medicines inaccessible. According to Investopedia, patients may start rationing medications or skipping doses entirely if prices rise—even slightly.

Generics Are Hit the Hardest

Brand-name drug manufacturers have wider profit margins and may survive tariff hikes more easily. Generic producers, which operate with slimmer margins, have less room to maneuver.

As described in a National Library of Medicine study, these companies are more likely to withdraw their products or refuse to ship to the U.S. if tariffs make their business models unsustainable. The impact is most severe for medications treating chronic conditions such as high blood pressure, diabetes, cancer, and infections.

When generics disappear from the market, patients may be forced to switch to costlier brand-name alternatives—or go without treatment.

Effects on Healthcare Institutions

Hospitals and clinics rely on consistent drug supplies. Many generic injectables and specialty medications are used in emergency departments, surgery centers, and cancer care units. Tariffs disrupt that consistency.

The American Hospital Association warns that rising drug costs will stretch hospital budgets and reduce flexibility in patient care. Some facilities may limit which drugs are stocked. Others may shift costs to patients or insurers.

This squeeze particularly impacts safety-net hospitals and rural providers, which already operate with limited resources.

Impact on Innovation and R&D

Pharmaceutical companies—especially smaller ones—may redirect funds from research and development (R&D) to cover new tariff-related expenses. As noted in a Harvard Business Review analysis, this shift could stall innovation and delay the development of new treatments.

Tariffs may also slow the production of biosimilars and generic versions of expensive biologic drugs. That weakens competition and limits future cost savings for patients.

Clinical Trials at Risk

Many clinical trials depend on a stable supply of medicines for treatment arms, comparisons, or placebos. If certain drugs become difficult to source due to tariffs, trials may pause or shut down.

The Johns Hopkins School of Public Health has noted that shortages caused by trade policy can compromise data integrity and delay drug approvals. This adds further friction to a system already struggling with complexity.

For patients enrolled in trials—many of whom rely on them for access to cutting-edge therapies—these disruptions can be devastating.

Vulnerable Populations Face the Greatest Risk

Tariffs make access harder for those with the fewest options. Seniors on Medicare, uninsured patients, and those with chronic illnesses are disproportionately harmed by medication shortages and price hikes.

The burden often falls on people with diabetes, heart disease, cancer, or autoimmune disorders. Missed or delayed treatment leads to complications, hospitalizations, and long-term health declines. According to Paloma Health, medications like thyroid hormone replacement and GLP-1s already face access barriers. Tariffs could further restrict availability.

For public health systems, this creates new challenges in disease control and equity.

International Retaliation Makes It Worse

When one country imposes tariffs, others often retaliate. Pharmaceutical tariffs from the U.S. could prompt foreign governments to raise taxes or restrictions on American-made drugs.

Reuters reported that an EU-U.S. trade conflict could add $19 billion in costs for the pharmaceutical industry. That ripple effect would reduce global supply flexibility and further destabilize medicine access in the U.S.

Global cooperation is essential for pharmaceutical resilience. Tariff battles strain that cooperation and make drug shortages more likely—not less.

Industry Warnings Are Loud and Clear

Healthcare experts, researchers, and industry leaders have issued widespread warnings about the consequences of pharmaceutical tariffs. In the Sermo report, the majority of healthcare professionals said tariffs would exacerbate current shortages and raise treatment costs.

Likewise, analysts from PwC stress that tariffs are unlikely to achieve their policy goals. They argue that targeted incentives or supply chain modernization efforts would be more effective and less disruptive.

Better Alternatives to Tariffs

Policymakers who want to reduce dependency on foreign drug sources have options that don’t involve sweeping tariffs. These include:

• Manufacturing incentives: Tax breaks or grants to expand domestic production capacity
• Public-private partnerships: Joint efforts to build resilience and reduce drug shortages
• Strategic national stockpiles: Reserves of essential medicines to cushion against disruptions
• Fast-tracking approvals: Streamlining the FDA process for generics and biosimilars
• Cooperative trade agreements: Strengthening partnerships with allies instead of severing supply lines

Each of these tools avoids the blunt-force impact of tariffs while still working toward a more secure and sustainable pharmaceutical supply.

The evidence across healthcare systems, expert communities, and economic modeling points in the same direction: tariffs on pharmaceutical imports are more likely to worsen drug shortages than to fix them. Until domestic production can catch up—and that’s years away—millions of patients remain vulnerable to any disruption.

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